Tax is now an imperative for the Boardroom

Following the Finance Ministers Budget Speech on Wednesday afternoon, KPMG hosted an event yesterday for clients to unpack the Tax changes in the Budget Speech and to highlight the complex and challenging environment in which corporates need to manage their taxation affairs going forward.

"While the Minister did not announce major tax changes in the current year, the complexity and challenges of the existing tax environment means that it is time for tax to be a boardroom level topic again,” said Alan Field, Director, Chairman of Tax and Legal, KPMG in South Africa.

KPMG believes that the need to elevate the tax discussion on the boardroom agenda is becoming more crucial. Apart from a tax environment which remains highly complex, certain trends, such as globalisation, transparency, exchange of information between authorities in multiple jurisdictions, and an increase in reported tax disputes, make it necessary for boards to be more proactively involved in governing the tax affairs of their companies.

"Not many companies would have predicted that their Tax Affairs would be the topic of newspaper headlines around the world”, said Field.

Directors’ have a dual role to play. On the one hand, they face the challenging task of ensuring that their companies fully understand the increasingly complex Tax laws around the world, in order to behave as responsible corporate citizens. At the same time, they have a fiduciary duty to their stakeholders to ensure that the taxes paid are validly due under the law – which was becoming an increasingly blurred line given the emergence in the world of the concept of a ‘morally’ correct amount of taxation to pay.

WHY REGISTER WITH SAIT?

Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.